Principles of Accounting 1
Christina Doty
American InterContinental University
January 9, 2013

Dear Dad,I’m writing this letter in the hopes that I can help you better understand accounting, and use your new software more efficiently, and accurately. I know accounting can seem frustrating, tiresome, and difficult to learn or comprehend. I will explain things so that you will be able to understand them.

Dad you need to understand what accounting is, Accounting is the process of keeping track of financial transactions, and analyzing and processing financial information to make business decisions and communicate the financial position of a company (Board) .You also need to know the accounting equation it is Assets=Liabilities + Owner’s Equity.

Assets: Are the resources owned by a business like their cash or land. Liabilities: Are the rights of the creditors are the business’s debts. Owner’s Equity: Are the rights of the owners.

The income statement is a statement that shows a company’s net income or loss over a specific accounting period after all revenues and expenses are accounted for. The balance Sheet is a list of all the assets, liabilities, and owner’s equity accounts and balances as of a specified date. There are rules to follow with debits and credits regarding the income statement and balance sheet increases in assets are recorded on the left side called a debit, while credits decreases in assets are recorded on the right, but that also changes with whatever transaction is being made. Based on the accounting equation: A=L+E Debit Credit

YOU MAY ALSO FIND THESE DOCUMENTS HELPFUL

...The Basic Principles of Accounting
Cherry Marler
ACCT205-1203A-17, IP-1
Instructor Jeffery Bloom
June 06, 2012
Abstract
Accounting is used for several purposes. Investors, creditors, and individuals use accounting to see whether a business is successful or not. Managers and employees use accounting to make decisions on certain objectives. There are four main statements used in...

...﻿Q & T Explain what debit and credit mean.
T For each of the following transactions of Dennen, Inc., for the month of January 2015, indicate the accounts, amounts, and direction of the effects on the accounting equation. A sample is provided.
a. (Sample) Borrowed $30,000 from a local bank
b. Lent $10,000 to an affiliate; accepted a note due in one year.
c. Sold 100 additional shares of stock with a par value of $.10 per share to investors for $500 cash.
d. Purchased $15,000 of...

...﻿Teeya Clarke
MBA 621-Financial and Managerial Accounting
July 11, 2015
Problem 2-3
Indicate the net effect on assets, liabilities and owners’ equity resulting from each of the following transactions:
Assets=Liabilities+owners’ Equity
1. Capital stock was issued for $100,000 cash
This will increase assets by $100,000 and increase equity by $100,000
2. Bonds payable of $25,000 were refunded with capital stock.
The liabilities will be decreased by 25,000 and...

...general-purpose financial statements for making business decisions (American InterContinential University [AIU], 2015). It allows accounting data to be converted into efficient information. It reduces confusion in decision making and presents an effective and systematic basis for making internal and external business decisions (Chiappetta, Larson &Wild, 2002, p.22).
Internal users of accounting include managers, officers, internal auditors, consultants, budget...

...The role of accounting is to allow business owners to make informative decisions. The main objectives of accounting are to maintain a record of business transactions, calculate profit and loss and depiction of financial position.
Recording business transactions accurately is essential in accounting. If proper and complete records are kept, it will make it easier to find and correct any errors made. Different officials can also use records for...

...﻿ACG6026 Boot Camp Quiz
Fall 2013
1. Which of the following is the fundamental accounting equation?
a. Current assets + Current liabilities = Owners' equity
b. Assets + Owners' equity = Liabilities
c. Cash = Debts + Common stock
d. Assets = Liabilities + Owners' equity
2. Which one of the following best describes a balance sheet?
a. A description of the entity's operations over a period of time
b. A snapshot at a point in time of an entity's...